Surveys Confirm FATCA Compliance Burden
Both the Securities Industry and Financial Markets Association (SIFMA) and Mindtree, a global technology services company, have pointed out the immense global compliance costs and issues posed by the Foreign Account Tax Compliance Act (FATCA) to the financial services industry.
Enacted by the US Congress in 2010, and effective from July 1, 2014, FATCA is intended to ensure that US authorities obtain information on accounts provided by foreign financial institutions (FFIs) to US persons. Failure by an FFI to disclose information about their US clients will result in a requirement to withhold 30 percent tax on payments of US-sourced income.
Mindtree, releasing the results of its Strategies for Achieving FATCA Compliance survey, which was conducted in May and June this year by Gatepoint Research, also noted the challenges that risk, compliance and information technology decision-makers (in businesses specializing in capital markets and commercial lending) face in achieving FATCA compliance.
67 percent of the finance executives surveyed said that the complexity of FATCA requirements was the greatest challenge to being compliant, while 49 percent reported that FATCA verification and due diligence procedures presented a major business challenge.
When surveyed, just under half of surveyed finance executives (48 percent) expressed some concern at their ability to meet FATCA requirements by July 1, 2014. When asked which department was responsible for FATCA compliance, answers included Chief Financial Officer (24 percent), Chief Risk Officer (22 percent) and Chief Compliance Officer (13 percent), but a “surprising 27 percent admitted they didn’t know who was responsible.”
Source: taxnews- Surveys Confirm FATCA Compliance Burden
